from the shoes-on-the-other-foot dept

For many years now, the MPAA and the various studios that make it up have filed various lawsuits against various internet platforms for not waving a magic wand and making piracy disappear. This also appears to be their big complaint against Google, which has bent over backwards trying to appease the industry and it's still not enough (of course, that may be because what the industry really wants from Google is money, not stopping piracy). But now the shoe is somewhat on the other foot as Sony Pictures is being sued for failing to stop piracy. Really.

The case stems from the infamous Sony hack from a year and a half ago, where all of Sony Pictures' emails were released onto the internet. Possibility Pictures is suing Sony claiming the hack created a breach of contract in its failure to stop piracy of its film, To Write Love On Her Arms (TWLOHA), a 2012 movie starring Kat Dennings, based on the true story of the struggles a woman went through leading to the founding of her charity (which goes by the same name as the movie). While most people focus on the emails from the hack, it should be noted that before those emails were released, the hackers released some pre-release films... including TWLOHA. And that, Possibility claims, is a breach of Sony's contract.

Reading through the full filing, the key breach appears to be of Section 16.7 of the contract, which includes an "anti-piracy authorization" stating:

So that's kind of amusing, since the clause is clearly designed to give Sony the power to send out threat letters and takedowns and use DRM and other such stuff -- but Possibility is basically turning it around on Sony and arguing that its failure to stop piracy shows that it did not use "appropriate technical measures." I'm not sure a court will go for this kind of judo move in flipping the anti-piracy authorization clause around to suggest that it puts certain contractual requirements on Sony Pictures, rather than simply authorizing it to do certain things as the language is clearly designed to do.

The lawsuit goes on and on about all of the great marketing plans Possibility had for the film (Justin Bieber's mother was going to tweet about it!), but apparently that was all ruined when the hackers, whoever they were, leaked the film. It also highlights Sony's earlier security problems, focused on the famed PSN hack, even though that's an entirely separate subsidiary from Sony Pictures. And then it spends a lot of time pointing to reporters who pointed out that Sony Pictures' computer security was abysmal. That's true... but it's not clear that's against the law. Basically, this lawsuit is mostly "Sony incompetent" and then "because of that our contract was breached."

Possibility then tries to show damages from the leak of the film.

The direct and proximate result of the foreseeable and avoidable Data Breach just four months prior SPWA's planned release of the Picture was an extreme dilution of the otherwise viable market for Plaintiff's Picture. The November 2014 Data Breach resulted in the unauthorized release of the Picture on multiple sites worldwide and destroyed the audience demand for the Picture. Following the Data Breach and worldwide pirated release of the Picture, SPWA abandoned the social marketing plans and lost all interest in promoting and marketing the Picture since it was otherwise available for free as a result of its failure to maintain adequate security of the Network. As an isolated sample of the damage caused the anticipated video-on-demand ("VOD") revenue stream of the Picture, note that in the first six days alone following the Data Breach, the stolen Picture master was downloaded-for-free a reported 19,949 times (an average rate of over 3300 illegal, revenue-free downloads per day).

So... a few things on this. First, downloads don't equate to lost sales, generally speaking, so the attempt to suggest that here without further evidence is pretty silly. Second, less than 20,000 downloads is... kinda weak. It certainly suggests there wasn't much interest in the film in the first place. Third, the idea that there's no market for a movie that's available for free online is easily debunked by the numerous movies that do quite well at the box office and in the home video market despite also being pirated online.

However, the more interesting bit is that this puts Sony Pictures in the fairly awkward position of potentially having to argue that piracy isn't really that damaging to a picture. I'm guessing that Sony Pictures and the MPAA want no part of that argument ever being filed in a court, because it will boomerang back to hurt them.

Either way, the filmmakers are demanding almost $9 million:

The amount of that revenue for which we seek payment, less amounts paid to date, is $8,738,331...

For a movie that not that many people seemed interested in?

Separately, Possibility notes that Sony pointed out that there's a binding arbitration clause in their contract, and Sony has already said that if there's a dispute it must be handled by such an arbitration setup. Possibility tries to get around this, but (unfortunately!) courts have tended to accept these binding arbitration clauses as valid.

If I had to put odds on it, I wouldn't give this lawsuit much of a chance of surviving. The attempt to turn an anti-piracy authorization clause into some sort of requirement to block piracy is a massive stretch. The mandatory arbitration clause is also a problem. Plus, the overall lawsuit is pretty weak. The claim itself is not very well backed up. Chances are Sony can get this tossed out quickly -- but it will be amusing to see if it has to argue that piracy isn't really that damaging. That would be fun.

from the it's-$330,000-by-the-way dept

Yeah, so the Sony Pictures hack is basically old news at this point. People have gone through it for all the juicy details and it's been out of the news for quite some time. So, apparently, one Sony "legal affairs" exec decided that perhaps he could engage in a little copyfraud to try to hide some info without anyone noticing. As TorrentFreak first noticed, however, Sony Pictures Legal Affairs VP Daniel Yankelevits wasn't particularly subtle in sending a DMCA notice to Google, asking it to delist the Wikileaks page with a search engine for all of the Sony Hack emails. The full DMCA notice is as stupid as it is faulty:

There are oh so many things wrong with this -- many of which you'd think a "legal affairs" VP at a giant entertainment company would know about before sending it. But, to be fair, Yankelevits appears to be more of a contracts / "dealmaker" legal exec, rather than an intellectual property expert. But, still...

Yankelevits gets almost everything wrong with this bogus takedown. Let's count the ways:

This is not a legitimate DMCA notice by any means. He does not specify what copyright is being infringed (because none is).

"It's not right" is not a claim of infringement.

His salary info ($320,000 possibly rising to $330,000, by the way) is not copyright covered material.

His clueless request asks for "https://wikileaks.org/sony/emails" to be removed. That's the front page for Wikileaks' archive of all the leaked Sony emails. That means that the actual email wouldn't even have been removed from Google's Index if Google had complied (which it did not).

Clearly, Yankelevits does not hold the copyright on the email in question, which was not written by him.

Yankelevits sent the bogus DMCA takedown on behalf of Sony Pictures, despite there clearly being a personal motive behind it. It makes you wonder if Sony Pictures lets any exec just file DMCA notices in its name.

Yankelevits lists the actual email URL as the "original URL" which makes no sense. The "original URL" is supposed to be where the content was copied from.

So, here we have a Sony Pictures legal exec filing a DMCA notice so stupid that it fails to make a copyright claim, fails to list the infringing work, and instead points to the email he really wants taken down as the "original" work, and demands a different URL (which doesn't have the info he's trying to hide) get taken down -- and it's all because he doesn't want his salary posted, because "it's not right" which is, you know, not how copyright law works, at all.

But it does give you some enlightenment into how a top lawyer at Sony Pictures actually recognizes that the DMCA is a tool for censorship, yes? Well, that and the caliber of the legal minds working at Sony Pictures in their "dealmaking" division.

from the thread-that-needle,-sony... dept

In the wake of the Sony Pictures hack, the company went somewhat ballistic in trying to describe just how "harmful" the hack was. It brought on famed lawyer David Boies to threaten anyone who published any information from the hack, claiming that it was a violation of the First Amendment (yes, it told the media that publishing news was a violation of the First Amendment). The company also (ridiculously) threatened to sue Twitter, claiming that Twitter would be held "responsible for any damage or loss arising from such use or dissemination by Twitter." Thoughout it all, Sony kept arguing that this hack was a complete disaster and incredibly harmful.

However, now, in court, Sony is suddenly forced to tap dance around those claims and argue that there has been no harm at all done to the employees of the company, who have filed a class action lawsuit against Sony Pictures for failing to protect their data. In a filing first highlighted by Eriq Gardner at The Hollywood Reporter, Sony Pictures insists that basically there has been no harm whatsoever and mocks the employees who say otherwise, noting that their "PII" (Personally Identifiable Information) disclosed was not particularly private in the first place.

Plaintiffs’ experiences in the wake of the cyberattack are entirely consistent
with the empirical consensus just discussed. To start, the PII disclosed for each
Plaintiff varies widely.... For example,
Mathis asserts only that her name, SSN, and former (not current) home address
were disclosed.... (Even on that score, she appears to be
wrong. Plaintiffs cite no evidence that her SSN was disclosed. The sole document
they cite... has the SSN of a different Mathis.) For his part, Forster believes an array of his PII was disclosed, including his SSN and birthday,
as well as outdated bank information, an invalid driver’s license, and former
medical insurance information (which he admits are “useless” or “worthless”)....

What is more, some Plaintiffs maintain active online presences, which
means that much of the PII they claim was disclosed in the cyberattack already had
voluntarily been made available online. For example, while Forster complains that
his title, place of work, and dates on which he joined and left SPE were disclosed,
he acknowledges that he had posted that information to LinkedIn and thus could
not be harmed by its disclosure.... Levine likewise admits that he has “put a lot of
[his] life online.” ... For him and others, a wide range of PII
was available online prior to the attack.

The other line of defense? If there is any harm, who can really say that it actually came from the Sony hack, rather than any other recent hack?

Plaintiffs (and, undoubtedly,
unnamed classmembers) have been exposed to multiple breaches and incidents of
identity theft involving various permutations of their PII.... To prove
that any injury—or even risk of future injury—is attributable to the cyberattack,
each classmember would have to show that this cyberattack, and not another event,
caused any incident of identity fraud.

The other problem is that the only actual loss that any of the plaintiffs show right now was an unauthorized purchase on a credit card, but the filing points out, this employee was fully reimbursed (i.e., no loss) and it's also not at all clear that it happened because of the Sony hack.

Similarly, while Corona claims that
somebody made an unauthorized purchase using his credit card after the
cyberattack on SPE (for which he was fully reimbursed), he acknowledges that he
also had unauthorized purchases on his credit card before the cyberattack, and that
he could only “guess” at the connection, if any, between the more recent
unauthorized purchase and the cyberattack.

To be honest, Sony's argument here is pretty strong. Courts have pretty consistently rejected class action lawsuits over data breaches when there are no actual losses, or where the losses are purely theoretical. It seems very likely that the former Sony employees here are going to lose.

But... it does seem rather amusing to see Sony -- which went on and on and on about all the "damage" the leak was going to cause -- now have to argue that its own employees experienced no harm at all...

from the oh-really? dept

We've already covered some of the details coming out in the flurry of legal filings in the dispute between Google and Mississippi Attorney General Jim Hood (helped along by the MPAA which financed and ran Hood's investigation). However, there is one little tidbit mentioned towards the end in one of the MPAA's many filings resisting subpoenas from Google to turn over internal documents. The MPAA's lawyers at Jenner & Block not only argue that much of the material being requested is "privileged," and thus allowing the requests will lead to lawsuits over the legality of those requests, but further argues that the emails in the Sony hack are similarly privileged and should not be available for use in lawsuits:

Quite apart from the policy concerns that arise if lawyers are allowed to use confidential
documents first obtained by hackers, the fact that some privileged documents were published in
the wake of the Sony hack will trigger subsequent litigation over privilege assertions. Privileged
documents obtained by hackers and later published nevertheless remain privileged. Presumably,
given Google’s apparent interest in the documents, Google will contest the privilege assertions.

This seems like a pretty longshot legal argument. It's pretty typical in business settings that once documents are out there in the public, any legal restrictions on them vanish. The idea that these documents, widely discussed publicly and in the press, would magically be banned from use in a legal case that was brought on because of those revelations is a huge stretch.

from the so-that-happened dept

The NY Times has an interesting profile of "Fusion" -- the briefly high-profile project that was a combined offspring of Disney and Univision. Fusion got some attention last year for scooping up a bunch of high-profile journalists (including a few that I really like) to power its rush into the "we'll cater to the millennials!" market. The article suggests things aren't actually going that well, but that's not that interesting to me. Instead, what caught my attention was a brief aside about how Disney keeps stepping in to tell Fusion to shut up about stuff that Disney and its friends in Hollywood don't like -- such as coverage of the leaked Sony emails:

For instance, according to two senior Fusion staff members, who spoke on the condition of anonymity, Disney put the organization on notice that it would not take kindly to coverage that might dent its standing with consumers. The warning came after Fusion published several stories based on documents that hackers stole from Sony.

Fusion is not alone: In negotiations to create a Vice cable channel, Disney and Hearst insisted on a clause protecting the companies in the event that Vice content “embarrasses Hearst or Disney in any way,” according to people with knowledge of the matter, who spoke on condition of anonymity to discuss private negotiations.

Hmmm. If true, I'd hope that some of the journalists who joined Fusion would consider standing up and speaking out about that kind of bullshit corporate interference with the journalism side of things. Every time a big company owns a journalism outlet, we always hear that they promise not to interfere, but everyone knows the reality is different. But for the actual journalists, this kind of thing requires standing up and telling the corporate parents to shove off.

And it is true that Fusion was one of the leading online sources publishing stories based on the hacked Sony emails, with a wholebunch of storiesby both Kevin Roose and Kashmir Hill -- two of Fusion's high-profile hires. It doesn't appear that either have written about the Sony hacks since back in December -- even though there have been a bunch of stories that have come out of the leaks since then.

Remember when CBS stepped in and blocked CNET, a publication that it owned, from giving an award to DISH, because CBS was involved in a legal dispute with DISH? At least one CNET reporter ended up resigning over that kind of interference. If the reports about Disney interfering with Fusion's coverage of things like the Sony hack emails is true, one would hope that Fusion's high-profile journalists would do the same.

He did condemn WikiLeaks’ decision last week to publish a searchable list of the Sony materials, calling it “terribly wrong” and serving “no public purpose.” Dodd noted that many of the emails are from low-level employees who have a right to privacy.

Dodd said that the U.S. government was in the best position to try to go after the website not the trade organization he runs. In the case of the WikiLeaks situation, he praised Sony officials for being “highly responsive” in communicating with the proper authorities.

This is the same Chris Dodd who (before he worked for the MPAA) once gave a rousing speech at Google (of all places) in which he urged them to take a stronger stand against censorship and not giving in to government demands to block content.

Tell the Chinese government that Google.cn will no longer censor information with Google's consent. And should the Chinese government not find that acceptable, then Google.cn would shut down its operations. I understand that you've already moved all of your search records out of China, to prevent them from being turned over to the Chinese government. But what better way to affirm Google's commitment to the free flow of information as a human right, than to send this message to a nation with the largest population in the world?

But now, when a site is revealing some rather newsworthy leaked emails from Sony, Chris Dodd (MPAA version) wants the US government to throw the book at them and try to censor them. In that Google speech, Dodd said:

One way we respond to change, in my view, is to stand up, and to stand up for our principles, which do not change.

Apparently, your principles do change when the MPAA pays you over $3 million per year. I'm sure Dodd sleeps well at night with that money as a cushion, but I do wonder how he reconciles the fact that he sold out his principles.

from the that's-called-reporting dept

We've been discussing Sony's ridiculous threat letters to members of the press (including us) with claims about how they should not read, share or report on the leaked Sony emails, hinting at how this violates all sorts of laws. As we've explained, that's a bunch of hogwash. While the original hacking almost certainly broke the law, reporting on what's in there after it's been leaked remains entirely legal. And, if you want even more support for why it's important, with the latest Pulitzer Prizes being awarded, it's notable that one of the winners for investigative journalism went to Eric Lipton of the NY Times for a series of stories that he's done exposing the influence of lobbyists -- and that includes Lipton's excellent reporting (with Nick Wingfield) using the leaked Sony emails to detail how the MPAA was trying to bring back SOPA via influencing various State Attorneys General.

That reporting has been tremendously important in exposing how the MPAA has sought to undermine the will of the public that was so outspoken concerning SOPA, but which had no way to speak out about what was happening behind closed doors because of those very doors. The fact that these emails have shone a bright light on questionable moves by the MPAA has also highlighted why we need more transparency on the policy making front and an end to backroom negotiations. That doesn't mean whoever released Sony's emails was necessarily right to do so, but those reporting on them absolutely have done incredibly valuable and important work. And, yes, it's legal to do so, contrary to Sony's silly threats.

from the can't-make-this-stuff-up dept

And here's another one from the Sony archives, this time noticed by Parker Higgins. It involves an email thread between Sony TV's Chief Marketing Officer Sheraton Kalouria and the company's top intellectual property lawyer Leah Weil (with top TV exec Steve Mosko included in the cc: field). In the email, they're discussing a new "reputational initiative" by the MPAA. From other emails, it appears that the MPAA finally realized that its reputation was toxic, and figured that rather than, maybe, figuring out why that is, it would put together a marketing campaign to improve the public's view of the MPAA. Here were the four goals of the campaign:

Fill the knowledge gap about our industry

Change consumer perceptions

Claim our rightful position as innovators

Reframe our consumer message in a positive tone

I note that "stop suing our customers and biggest fans" and "stop trying to censor parts of the web or destroy innovations that challenge our business model" didn't make the list. That's too bad, as either of those steps might actually, you know, help improve the MPAA's reputation.

But the really amazing thing about the campaign? Apparently at least some of the video involved unauthroized copying of content from... Google. The same Google that the MPAA and studios had dubbed "Goliath" and who they were hell bent on destroying because of the misleading belief that Google helped people infringe on their copyrights. Here was Kalouria's email to Weil:

Also, I was somewhat horrified that their creative shop used footage from Google commercials in their “Swipe-o-matic”. I kid you not…some of those scenes of people being “moved” by movies are from a current Google campaign...!

Weil only responded with a single word:

Yikes!!!

Yes. If you've been following along with the home game, you know that the MPAA is really, really against copyright infringement (or at least that's what it would have you believe). And it believes that Google is the single-biggest problem in the copyright world these days. And yet, when it's time for the MPAA to put together some of its own propaganda to put some spit and polish on its down in the dumps reputation, what does it do? Make use of Google's footage and pretend that the people being "moved" are actually being moved by the MPAA's movies.

Apparently, infringing on the works of others is okay for the MPAA when it does it itself. And that's leaving out the extreme irony of using Google's ad footage as well. It's unclear if this MPAA film ever saw the light of day, but it would be fascinating to see if anyone has it...

from the that-fair-use-thing... dept

Back in December, when the Sony emails first leaked, we wrote about how Sony hired super-high-powered lawyer David Boies to send off ridiculously misinformed letters to media outlets warning them that they should not write anything based on information in the leaks. Boies took it a ridiculous step further, threatening to sue Twitter for not blocking screenshots of the emails. Both threats had no real legal basis.

Once again, the legal reasoning in the letter is... questionable at best. The included attack on Wikileaks is even more confused, arguing that freeing up this information helps North Korean censorship. It's difficult to see how that's really true, but okay. But the really ridiculous part is arguing that the media should not publish this information to support the First Amendment. Really.

SPE [Sony Pictures Entertainment] therefore again asks for your help in protecting the First Amendment and declining to exploit the Stolen Information. As I stated in my December 2014 letter, SPE does not consent to your possession, review, copying, dissemination, publication, uploading, downloading, or making use of any of the Stolen Information. And we again ask that you take all reasonable actions to prevent your company and any of your employees, independent contractors, agents, consultants, or anyone who may have access to your files from examining, copying, disseminating, distributing, publishing, downloading, uploading, or making any use of the Stolen Information.

This is a rather confused understanding of the First Amendment, and the rights of the press to look at and publish newsworthy information, even if it's obtained through more questionable means. Hell, it seems worth mentioning right about now that Sony Pictures Entertainment just happens to be making a movie about Ed Snowden. Apparently, it's fine and dandy for Sony to make a movie detailing how the press was able to report on a bunch of "stolen information," but if anyone in the media does that about Sony, then it's magically illegal? Is Sony really going to try to push that argument in court? Because it's going to get a massive First Amendment smackdown if it tries.

Thankfully, it appears that most of the press is ignoring these threats, and there have been a number of interesting and newsworthy stories coming out of people looking through the emails. Well, except for Hollywood's favored mouthpieces, like Deadline.com. It reported on this letter, but used it to repeat Sony's completely bogus talking points and insist that "respectable media outlets don't seem to have any appetite to re-enter territory that seemed morally questionable in December."

While one might argue that revealing internal gossip and bad jokes by Sony execs is morally questionable, it seems that stories about paying for political investigations of companies you don't like is extremely newsworthy. As is trying to influence international trade policy with statements that completely contradict what you've said publicly. There is plenty of newsworthy information in these documents, and the media would be doing the First Amendment a major disservice to ignore newsworthy information just because Sony doesn't like it.

from the about-time dept

A few years ago, the major record labels finally started to realize that, perhaps, shoveling many millions of dollars to the RIAA was a waste of good money, and they severely cut back funds. You may have noticed that, while the RIAA had taken the lead on the copyright front in the first decade of the new century, over the past few years, it's been a lot quieter than the MPAA. It appears that the MPAA may be about to go through a similar transition. Just a few weeks ago, we pointed out that the MPAA seemed to be desperately trying to justify its existence by doubling down on ridiculous and misleading claims about "piracy" and "content theft" rather than actually helping studios adapt to the modern era. We also noted that MPAA boss Chris Dodd was on something of an apology tour after the MPAA was caught completely off guard by the Sony Hack and did basically nothing about it, seriously pissing off execs at Sony.

In a behind-the-scenes drama, the Sony Pictures chairman Michael Lynton last month told industry colleagues of a plan to withdraw from the movie trade organization, according to people who have been briefed on the discussions. He cited the organization's slow response and lack of public support in the aftermath of the attack on Sony and its film “The Interview,” as well as longstanding concerns about the cost and efficacy of the group.

While the MPAA convinced Sony to stay in, it appears that the major studios are thinking it's about time the MPAA shift its focus -- and tighten its belt a bit:

If adopted, their still emerging propositions might jolt the group into line with the new realities of a changing entertainment business. They might, for instance, open the association to new members and expand its interests to include television programs or digital content. They might also reduce the heavy annual contribution of more than $20 million that is required of each of the six member companies: Walt Disney, Warner Bros., Paramount Pictures, 20th Century Fox, Universal and Sony.

The report notes that they might even give up their super fancy DC headquarters (the "Jack Valenti Building") which is just blocks from the White House.

Of course, it's not entirely clear how the MPAA's focus will actually change. It wouldn't be surprising to find some studio execs still want to double down on backwards-thinking, anti-internet campaigns. But, at least some seem to recognize that Hollywood hasn't kept up with the times, and that's partly because the MPAA kept focusing them on the last war, rather than on updating for the internet era.

Kevin Tsujihara, the chief executive of Warner Bros., said he, like Mr. Dodd, welcomed an examination of the organization that would mirror a similar review of cost and mission at his company. “Now is as good a time as any” to look at fundamental questions, Mr. Tsujihara said in an interview. He added: “We haven’t, as an industry, evolved fast enough.”

And, as we've pointed out, it really seems bizarre that the MPAA spends so much on an entire "content protection" division. At least some of the studios appear to be questioning the value of that approach:

But those briefed on the position of several companies said virtually all the studios have chafed lately at the high cost of maintaining the M.P.A.A., along with its worldwide antipiracy and market access operations, particularly as Sony, Warner and others are cutting staff and costs.

Frankly, as we've argued for years, it would be great if the MPAA actually became a forward-looking organization that looked to help the industry adapt to the modern era. It appears the organization is going through an inevitable crisis after years of making bad bets. Hopefully, it recognizes that embracing the future, rather than fighting it, is the way forward.